The crowd-sourced review website Yelp announced this week that it will be laying off 1,000 workers while instituting another 1,100 furloughs on top decreased hours in response to the COVID-19 pandemic.
According to Eater, Yelp CEO Jeremy Stoppelman sent an internal email to the company on Friday announcing the unfortunate news. Though Yelp is a web-based platform, traffic on the site has dropped significantly due to restaurant and bar closures.
“It’s been an extremely difficult and painful last month: the world is facing a global health crisis none of us have ever witnessed in our lifetimes,” said the email. “It has disrupted daily life for nearly everyone – from businesses that rely on foot traffic or human contact, to workers who have no visibility into when they will earn their next paycheck; and parents, including many of us here at Yelp, who are trying to juggle childcare with job responsibilities. People everywhere are staying in to stay safe, wondering when life will go back to normal. ”
Restaurants, Yelp’s most popular category, has dropped its traffic by 64% while nightlife has dropped 81%.
“The impact we’ve seen on consumer behavior is staggering: interest in restaurants, our most popular category, has dropped 64% since March 10, and the nightlife category is down 81%,” said Stoppelman. “Gyms and similar businesses are down 73%, and salons and other beauty businesses are down 83%. All told, the millions of local businesses hit hardest by the effects of COVID-19 face the prospect of closing and laying off their employees, without knowing when, or if, they’ll be able to reopen.”
Last month, the National Restaurant Association predicted that 11% of restaurants could be closing permanently. Hudson Riehle, the Association’s senior vice president of research, said the data shows the industry is in “uncharted territory.”
“Association research found that 54% of operators made the switch to all off-premises services; 44% have had to temporarily close down. This is uncharted territory,” said Riehle. “The industry has never experienced anything like this before.”
In what can only be described as an employment massacre, Stoppleman regretfully admitted that the company will be having to put at least 2,100 of its employees out of a job while reducing the pay for another sizable portion.
“Today we will let 1,000 of our colleagues go and furlough approximately 1,100 more, while reducing hours for others,” Stoppleman said. “Your department leaders will be in touch this morning to discuss how this affects you individually, and letters with more details and FAQs will follow this afternoon.”
As noted by Eater, SEC filing this past December showed Yelp employed 5,950 people, which means the company has cut 17% of its staff. Until business returns to some degree of normal, there is no telling when Yelp will be back to its full-capacity. Even if restrictions were slightly lifted in the coming months, restaurants will still have to maintain some degree of precautions, according to Chef Robert Irvine, who told Tucker Carlson of Fox News on Thursday that seating 300 people in a restaurant may not be possible anytime soon.
“We are not going back to full 300-seat restaurants,” admitted Irvine. “We have to let the guests know that it’s safe to come into not only the restaurant but the stores at the same time. People are going to be scared, and … we don’t know what’s going on. I’m not a doctor, [but] I know I want to get back to work. My life is about saving restaurants and that’s what I’ve been doing.”